Part 2: Definitions and Types of Innovation

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En provenance du cours de Technische Universität München (TUM)

The Economics of Agro-Food Value Chains

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Technische Universität München (TUM)

The Economics of Agro-Food Value Chains

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Have a look at our trailer for a brief introduction to this course: https://youtu.be/GADAgxTHjgE In this course, you learn how the agro-food value chain approaches the challenge of constantly improving its competitiveness by producing high quality food and products and also aiming to attain greater sustainability. Some of the topics of this course are: • The notion of quality for food and agricultural products and consumer value. • How to conduct market research in this field. • Labelling, branding and pricing strategies, as-well as innovation in the agro-food sector. • How sustainability can be used as a competitive advantage through corporate social responsibility. • The role and different types of industrial standards. • The different forms of coordination in the chain, in particular with regard to the retailing and distribution sector. This course is taught by a group of international experts from Universities in Italy, Germany, Ireland, Scotland and the Netherlands. Each of them will give you insights into a specific topic related to food quality and the organization of the agro-food value chains.

À partir de la leçon

Module 9: Innovation and Quality

In this module you will learn about innovation and quality. You will be able to define what is innovation and state the differences between the many types of innovations. You will also be able to explain how innovations are generated and how the drivers and barriers of innovation in the agro-food sector arise.

Part 1: Definitions and Types of Innovation8:39

Part 2: Definitions and Types of Innovation6:35

Rencontrer les enseignants

Hannes Lang
Research Associate
Technical University of Munich
Luisa Menapace
Professor
Technical University of Munich
Faical Akaichi
Research Economist
Scotland’s Rural College
Francesco Bimbo
Research Economist
Wageningen University
Montserrat Costa-Font
Research Economist
Scotland’s Rural College
Carlo Russo
Associate Professor
University of Cassino and Lazio Meridionale
Chenguang Li
Research Economist
University College Dublin

[MUSIC]

Our next example of organizational innovation is provided by

Syngenta in 2000.

Syngenta rearranged it's structure to improve the access and

sharing of its knowledge among its many department.

In the next slide, I'm going to use Syngenta as a case study to clarify and

illustrate the concept of organizational innovation.

How company rearrange the structure in order to provide a product with

a better quality for their customer.

Syngenta, first,

it's a global Swiss manufacturer that produce agrochemicals and seeds.

It was widely regarded as a leader in agricultural products.

And before 2010, Syngenta was organized in two division,

Syngenta seeds and Syngenta crop protection.

The seed unit was responsible for the development and

sale of agricultural seeds, instead the crop production division developed,

produced, and marketed products such as herbicide, insecticide and fungicide.

Sygenta entire operating structures evolve around the seed and

crop protection units, having a heavy focus on product

development through strong investment in research and development activities.

The company created expert in these two specific area of research and

the company structure led experts from the seed units and

the crop protection to work on same problems but

from two different perspective and using different technology,

without any kind of interaction among each other.

Forthmore every year farmers received a field visit from two Syngenta agents,

each one from different section, promoting seeds or fertilizer.

The same strategy was undertaken by Syngenta's competitors.

Therefore it was very difficult for farmer to select the right combination of seeds,

fertilizer, price, and the quality.

In 2011 also, Syngenta's customer were facing the increasing

cost of production in price volatility for their production.

Therefore, Syngenta that time decide to change its internal structure,

looking for synergy among its two divisions, the crop and seed unit.

By sharing knowledge between them, lowering the cost of the business, and

produce a product with a better quality.

The idea that time was to reorganize the structure with a new philosophy,

call it think as a farmer.

Thus Syngenta created a crop-based pipelines where all seed and

crop protection technologies and product for

a given crop will be evaluated and considered together.

Therefore, Syngenta rolled its seeds and crop protection division together and

shifted from a product perspective to a crop-based focus.

The idea, to integrate and share employees' knowledge on a specific crop,

led to the creation of improved products with higher productivity.

Indeed, Syngenta began to produce seeds that are genetically

resistant to disease and additionally coated with fertilizer that

protect the plants throughout the entire life cycle.

Additionally, farmers found a new products very useful,

as they generate higher productivity within only one solution.

This organizational change led Syngenta ABT team to grow and

Syngenta share price to increase.

Thus, farmer who had bought Syngenta's share in the stock market gained

additional income.

And what Syngenta did in 2011,

it's a clear example of organizational innovation.

Whereby rearranging the corporate structure, Syngenta was able to

develop improved products that could be better fit farmer's needs.

An alternative classification of innovations

divide innovations according to their level of novelty.

By using this classification, innovations can be divided into incremental and

radical ones.

A radical innovation is any innovation that produce completely new products.

This type of innovation has a significant impact on the market as well as on

the activity of firm that develops such innovation.

Radical innovation typically change the market structure, create a new market,

rendering existing products obsolete.

In the competitor view,

radical innovations create the major disruptive change.

Instead, incremental innovation continuously

advance the process of change.

Indeed, incremental innovation concern an existing product,

service, process or organizational method where its

performances have been significantly announces or upgraded.

Radical innovation are generated by complex and

time-consuming processes which imply difficulties and risks.

An example of radical innovation in the Agro-Food sector

is that insect-based foods are shown in the picture.

Such products is completely new for the Agro-Food market.

It can catch the attention of this consumer looking for

alternative source of protein.

On the other hand, incremental innovation is the most dominant form

of innovation in the Agro-Food sector.

Examples of incremental innovations are functional foods,

which are foods that defer from the regional one

due to the addition of a component that improves human health.

In this case, we don't have a completely new product or process.

But just a product [INAUDIBLE] compared with the previous one.

With the definition and types of innovation,

I conclude the first lesson of Model One.

See in Lesson Two of Model One, model of innovation and diffusion of an innovation.

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